This information was presented by John Lewis at its Xmas in July even in London. It's based on noises were hearing from suppliers.
● Likely to be sold as a multimedia device targeted at youth/kids
● Improved 5MP camera so can shoot HD video/upload to YouTube and flash so it can take photos in the dark - social networking
● Accelerometer and Gyroscope, a significant development in developing the gaming credentials of the product
● FaceTime calling over Wi-Fi so you can communicate with friends at zero cost
The update is expected in September when Apple usually refreshes the iPod.